NLRB Latest News

GC DENIES PROTECTION TO WORKERS ONCE AGAIN. THIS TIME TO RIDE SHARE DRIVERS.

May 21, 2019

The General Counsel of the National Labor Relations Board (NLRB) weighed in on the issue of employment status for ride share drivers in a memo issued on April 16, 2019. Not surprisingly, he agrees with Uber that these workers should not be given the protections of the NLRA.

In a recently released advice memo, the GC concluded that UberX and Uber BLACK drivers are independent contractors. When analyzing the relationship between Uber and its drivers, GC Robb states that he needed to primarily evaluate: “(1) the extent of the company’s control over the manner and means by which drivers conduct business and (2) the relationship between the company’s compensation and the amount of fares collected.” Looking at those factors, he concluded: “Consideration of all the common-law factors, viewed through the ‘prism of entrepreneurial opportunity,’ establishes that both types of Uber drivers were independent contractors. The drivers had significant entrepreneurial opportunity by virtue of their near complete control of their cars and work schedules, together with freedom to choose log-in locations and to work for competitors of Uber. On any given day, at any free moment, drivers could decide how best to serve their economic objectives: by fulfilling ride requests through the App, working for a competing ride-share service, or pursuing a different venture altogether. . . . [T]hese and other facts strongly support independent-contractor status and outweigh all countervailing facts supporting employee status.”

As most of our readers know, Independent contractor status poses significant consequences under the NLRA because such workers are not covered by the Act. They cannot form unions or seek redress for any alleged violations of the NLRA. This new advice memo sets forth a potential roadmap for employers seeking to use an independent contractor model and avoid the NLRA.

In fact, Robb ignores the reality of Uber’s relationship with its drivers and the myriad ways in which it controls the terms and conditions of their work. We view this as another example in which the Board and GC have shamefully sided with big-money corporate interests over working people at every turn. This Board and GC, in direct contrast to the Obama-era appointees, continue to put their thumb on the scale to reward companies that shirk their obligations to their workforce.

In fact, Uber maintains unilateral control over the pay rate for drivers, which is often below the minimum wage, and the many requirements that drivers must adhere to—including a high ride-acceptance rate, a low pickup-cancellation rate, and a very high average customer rating—or risk temporary or permanent ‘deactivation.’ In fact, drivers have so little independence that they often don’t know where they are taking a passenger or what they might expect to earn from a trip until that passenger steps in the car. Uber drivers are not running their own business, which is what it means to be an independent contractor. Uber drivers do not set their own rates; they do not choose their customers. They are not making investments in a business; they are in fact performing the core work of Uber. Not only do Uber drivers lose as a result of this wrong decision, the general riding public, which benefits from a dependable and reliable work force, will also lose.

GC SEEKS TO NEUTER “SCABBY THE FAT CAT”

May 21, 2019

Another advice memorandum just released by the NLRB’s General Counsel’s office could be the beginning of the end for “Scabby the Fat Cat,” and similar oversized balloons often employed by car dealers to attract customers and by unions to exert pressure on neutral employers. The Board’s counsel recommended in a May 14 memo that the NLRB reverse several Obama-era decisions that permitted the use of such balloons, as well as the erection of stationary banners, as lawful non-picketing secondary activity under the NLRA. If the current Board follows the recommendation contained in the advice memo, construction unions will lose a valuable tool in their organizing kit.

As most of our readers know, the Taft-Hartley amendments to the NLRA prohibit unions from threatening, coercing, or restraining others from doing business with a neutral employer when their actual dispute is with some other business who happens to be associated with that secondary or neutral employer. The most common way in which this might arise is when a construction union has a concern with a subcontractor on a job site and takes some action that interferes with the business of the general contractor or business owner – such as traditional picketing, or even “signal” picketing (actions that send a signal to the neutral employer’s workers that they should cease working and observe the picket line).

This may seem like an easy test to apply, but there has been considerable debate about what constitutes “threats, coercion, or restraint.” Most agree that any picketing urging a boycott of a neutral employer violates the Act, while handbilling (simply handing out material trying to persuade people from doing business with the target) is acceptable activity.

For nearly a decade, the Board has held that stationary bannering is permissible and a union is permitted to post agents holding large banners proclaiming “labor dispute” and “shame on [the employer]” in front of a neutral business, concluding that such conduct was not “picketing.” The Board said that the carrying of picket signs and “persistent patrolling” were necessary predicates to establish a violation of the Act. Stationary bannering is allowable because it does not block ingress or egress to the neutral business. Large, inflatable rat balloons are often allowable.

In late 2018, Summit Design + Build, a general contractor, was overseeing a project in downtown Chicago that included Edge Electric, an electrical subcontractor the IBEW had a primary labor dispute with over Edge’s failure to pay area standard wages and benefits.

The union erected a large yellow banner at Summit’s job site entrance that read: “LABOR DISPUTE: SHAME SHAME,” and also included Summit’s name. Moreover, about 15 feet away, the union set up a large, inflatable “Corporate Fat Cat” balloon. It was about 10-15 feet tall, dressed in a corporate suit with a cigar planted in its mouth, and it clutched a construction worker by the neck in a stranglehold. At least two other subcontractors refused to enter the premises and perform work for Summit as a result of the labor dispute. The union admitted that it did not have a labor dispute with Summit, but its actions were targeted at Summit as the general contractor, and not targeted at the employees of Summit or any other subcontractor.

The matter ended up before the NLRB, where the Region submitted the matter to the General Counsel’s office for advice. In an advice memo dated December 20, 2018 (but just released to the public on May 14), the General Counsel’s office urged the Board to overturn the Obama-era cases and conclude that the union’s activity violated the NLRA. The advice memo concluded that the union’s activity was tantamount to unlawful secondary picketing and urged the Board to issue a complaint charging the union with a violation of the Act. It contended that large banners and inflatables at the entrances of neutral businesses seek to dissuade the public from entering through illegal “coercive” conduct rather than permissible “persuasive” communication,” and that each of them was the “functional equivalent of a picket sign.” Of course, this is nonsense, but fortunately this specific case is not ripe for further action because an informal settlement was reached by the parties in February 2019. However, if and when another dispute arises involving “Scabby the Fat Cat”, other inflatables or stationary banners, we know the General Counsel’s office will recommend the Board revisit the prior precedent and rush to overturn a decade of well thought out existing precedent.

New GC Memos Regarding Beck Procedures

May 20, 2019

In United Nurses & Allied Professionals (Kent Hospital), the Board recently determined that nonmember objectors cannot be charged for lobbying expenses (see article below). In the Trump Board’s view, lobbying is not the kind of activity that is a necessary function for a union to perform exclusive bargaining representation, and therefore falls outside the scope of permissible uses for dues and fees.

Challenging Chargeability of Expenses

If believed to be overcharged fees, a Beck objector may either file a duty of fair representation charge with the Board or file a challenge pursuant to the Union’s established procedure. If the objector does not like the outcome of the Union’s procedure, he/she may thereafter file a charge with the Board.

Unions will now have the Burden of Proof to Justify their Expenses

Objectors are no longer required to explain why a particular fee is nonchargeable or to provide evidence in support of their claim. The Union must justify their expenses and provide a copy of the audit verification letter demonstrating the breakdown of chargeable and nonchargeable expenses to all objecting nonmembers. If the Union’s explanations raise concerns, the Region should then request further evidence and justification before making a determination.

Secondary Expenses to Lobbying Activities

A Union’s Beck obligation is not satisfied through deduction of its lobbying expenses alone; a reasonable amount of overhead and spillover costs must be deducted as well. The Union may prorate a portion of overhead costs for this purpose. A Union’s failure to make good faith efforts to identify secondary expense amounts will violate its duty of fair representation, no matter how minimal the overcharge.

Changes urged by GC on law governing check-off authorizations

In another blow to labor, the Trump-appointed NLRB General Counsel announced earlier that he will be issuing complaints for the purpose of urging the Board to adopt changes in the law governing Beck objections and withdrawal of check-off authorizations.

The General Counsel will urge the Board to require that a union's notice to employees of their right to be objecting nonmembers also include a reasonable estimate of the fee reduction, if any, for objectors. The Memo states that the notice must be given annually without acknowledging that this would require a change in the Board's existing precedent.

The General Counsel will also urge several changes in the law governing revocation of check-off authorizations. The General Counsel would require unions to honor withdrawals at the expiration of the applicable collective bargaining agreement and during any subsequent period in which no agreement is in effect. He will issue complaints challenging cards that purport to limit revocation at the expiration of the agreement to a window period. He does not challenge restricting revocation during the agreement's term to annual window periods. However, the General Counsel would require a union that receives an untimely revocation request to either tell the employee the dates of the next window period or that the request will automatically be honored during that next window period. Lastly, the General Counsel has said he will challenge a union requirement that a revocation be sent by certified mail.

Any Union using its general fund, instead of a separate voluntary political action fund (“PAC”), to participate in lobbying should contact counsel to verify that proper procedures are in place. Obviously, the use of PACs is strongly encouraged.

The NLRB has held that picketing notices sent by unions to neutral employers about planned picketing actions at the neutral’s work site violate the NLRA, if the notice fails to indicate the picketing would conform to the Moore Dry Dock standards and established precedent.

In this matter, unionized electrical workers performed services for a primary employer at the Las Vegas Convention Center and for several neutral employers at the same work site. Prior to picketing, the union sent a notice to a neutral employer about picketing and asked for their cooperation during the strike. The primary employer filed ULP charges against the Union for coercion in that the union’s notice did not conform to the Moore Dry Dock standards. Member McFerran criticized the board’s adherence to “formalistic rules” that ignore the realities of labor relations.

This case is a good reminder that letters sent to neutral employers should first be reviewed by counsel and should normally not mention picketing, as compared to hard-billing, which is clearly protected.

DFR MEMO

Recently, the Trump-appointed General Counsel Peter Robb of the NLRB advised NLRB Regional Directors around the country to take a new and more aggressive approach in investigating and responding to certain types of claims by employees against Unions who represent them in connection with grievance processing. This is a quick summary of the changes they have been told to put into effect:

Unions whose negligence results in a grievance not being pursued, or being lost, because time limits were missed will no longer be able to defend these mistakes based upon ordinary negligence, without any showing of a bad faith motive. The best example of this type of situation is where an employee talks to a Union steward about filing a grievance, the steward agrees to get the grievance on file but forgets to do so. Subsequently, the grievance cannot be pursued because the time limit has run. Even though there is absolutely no indication the steward or anybody else was trying to undermine the employee’s interests, and all the evidence shows that the only reason the grievance was not pursued in a timely way is that the steward forgot, this may not work to get the Union off the hook. Now, UNLESS the Union is able to show that it has systems in place that are reasonably designed to guard against something like this happening, the Regions have been instructed to issue a complaint. THIS MEANS EVERY LOCAL UNION SHOULD HAVE A PROCEDURE IN PLACE TO LOG EVERY GRIEVANCE THAT IS FILED/REQUESTED AND TO MAKE SURE THE GRIEVANCE IS PROCESSED IN A TIMELY MANNER.

Also, communications by a Union with an employee about his or her grievance or grievance-related issues will be more strictly scrutinized. The Regions have been instructed that a Union’s failure to respond to inquiries from employees about the status of their cases, or failure to provide employees with documents they request that relate to their grievances, can be violations of the duty of fair representation. This is a clear departure from many years of Supreme Court and NLRB precedent. Nevertheless, the General Counsel states that a Union’s failure to communicate with a member about a grievance will be found to constitute a violation, even if the Union has decided not to pursue the grievance and that decision is found to be a proper exercise of the Union’s discretion.

Many of our Union clients could face serious legal jeopardy based upon these new initiatives from the NLRB General Counsel. These new initiatives should not be minimized. We strongly urge you to take these concerns seriously and to establish systems and procedures that will protect your Local from the types of attacks the General Counsel is seeking to lead. We remain available to work with you to establish and communicate such systems and procedures.

BOEING MEMO

General Counsel Robb has issued a memo to NLRB’s Regional Directors offering guidance in applying the Board’s Boeing decision, discussed below, when considering the legality of workplace rules. Certain policies, including those on civility, will be considered presumptively lawful and enforceable. Others, such as rules banning discussions of compensation, will be treated as unlawful. Robb instructs the regional offices to refer cases when there is uncertainty to the Board’s Division of Advice for direction.

The General Counsel’s memo, issued at the beginning of June, provides very specific guidance regarding the placement of work rules into each of three categories discussed in the decision and provides examples. On the positive side, the memo makes clear that work rules specifically banning protected concerted activity or are enacted in response to organizing or other protected activity remain unlawful. And it also makes clear that while the maintenance of a particular rule might be lawful, the application of such rules to employees who have engaged in protected activity may violate the act, depending on the particular circumstances.

Joint-employer rule making is coming soon. NLRB Chairman John Ring has indicated that the Board majority favors issuing a rule on joint-employer liability. He expects a proposed rule to be issued by the end of the summer. The Board’s December 2017 Hy-Brand decision temporarily overturned the Obama-era Browning-Ferris test for joint-employer status, rejecting its broad “indirect control” standard. Hy-Brand was overturned when it was alleged that Board member William Emanuel had a conflict of interest and should have recused himself. The Board will also review its process for determining conflicts of interest on the part of Board members.

DECISIONS

BOARD FAVORS NON-MEMBER OBJECTORS ONCE AGAIN

March 4, 2019

United Nurses & Allied Professionals (Kent Hospital), is the Board’s latest decision discouraging union membership by enhancing the rights of non-member objectors under the Supreme Court’s decision in Communications Workers of America v. Beck, 487 U.S. 735 (1988). According to this new decision, issued March 1, non-member objectors cannot be compelled to pay for union lobbying expenses. The Board majority held that lobbying activity, although sometimes relating to terms of employment or incidentally affecting collective bargaining, is not part of the union’s representational function, and therefore lobbying expenses are not chargeable to Beck objectors. The ruling relies on Beck, and related judicial decisions, holding that a union violates its duty of fair representation if it charges agency fees that include expenses other than those necessary to perform its statutory representative functions.

The Board majority also held that it is not enough for a union to provide objecting nonmembers with assurances that its compilation of chargeable and non-chargeable expenses has been appropriately audited. Citing the “basic considerations of fairness” standard adopted by the Supreme Court, the Board held that a union must provide independent verification that the audit had been performed. Failure to do so violates the union’s duty of fair representation.

Once again, the Board is showing its open and blatant hostility toward unions by adopting this enlarged standard under Beck and forcing unions, in many cases, to conduct independent audits and thereby incur additional unnecessary expense.

Chairman John F. Ring was joined by Members Marvin E. Kaplan and William J. Emanuel in the majority opinion. Lone labor appointee Member Lauren McFerran dissented.

BOARD LEAVES EMPLOYEES OUT IN THE COLD

February 27, 2019

In Recology Hay Road, the Board tightened the standards for including subsequently added job classifications into an existing bargaining unit by way of its accretion doctrine. This case represents a departure from long standing interpretations given by the Board in subsequent accretion cases relying upon Safeway Stores, Inc., the leading 1981 decision on the issue.

Overruling the Regional Director, the Board found that the “heavy burden” of establishing an accretion was not met when the Union claimed that two (2) new positions within a newly added job classification were added to a forty (40) plus member bargaining unit. The highly questionable reasoning offered by the Board was that there was “at least some separate identity” between the new job classification and the remaining bargaining unit jobs. There was insufficient evidence that the members of the new job classification “share an overwhelming community of interest” with the remaining members of the bargaining unit, there was no evidence of interchange (of course the new job had just been created so that was self-evident), and the working conditions were not “almost identical,” as the Regional Director had concluded.

Of course, this leaves an unrepresented residual unit which the employer will probably take advantage of unless the union decides to file for them as a separate unit. No doubt, the employer will then claim they are supervisors. This is such a travesty of NLRA goals and precedent.

Chairman John F. Ring was joined by Members Marvin E. Kaplan and William J. Emanuel in the majority opinion. Lone labor Member Lauren McFerran did not participate in the decision.

BOARD REVERSES HOLDING: FRANCHISEES ARE NO LONGER STATUTORY EMPLOYEES

January 25, 2019

In SuperShuttle DFW, Inc., the Board reversed a prior Obama-Board ruling by holding that certain “franchisees” are not statutory employees under the National Labor Relations Act (the Act), but rather independent contractors excluded from the Act’s coverage. The case involved shuttle van drivers for SuperShuttle at Dallas-Fort Worth Airport. This reversal was not unexpected, given the Trump-Board’s evident hostility toward any expansion of workers’ rights.

The Board found these workers were, in fact, “franchisees” who leased or owned their work vans. Their method of compensation and nearly unfettered control over their own daily work schedules and working conditions provided these “franchisees” with significant entrepreneurial opportunity for economic gain. This factor, along with the absence of supervision and the parties’ understanding that the franchisees are independent contractors, resulted in the Board finding that these “franchisees” are not employees under the Act. The decision affirmed the Acting Regional Director’s finding that the “franchisees” are independent contractors.

The decision overrules FedEx Home Delivery, a 2014 NLRB decision that modified the applicable test for determining independent contractor status by severely limiting the significance of a worker’s entrepreneurial opportunity for economic gain.

Chairman John F. Ring was joined by Members Marvin E. Kaplan and William J. Emanuel in the majority opinion. Lone labor Member Lauren McFerran dissented.